Try plugging the phone cable into the other jack. The only time I have ever gotten that message is when I forgot to plug in the phone cable. Or maybe try another cable. If when you go to control panel modems, see that a standard modem is listed, click on diagnositcs, see that a standard modem is listed on com1, highlight com1 and click on more info, you should get:
Port Info Com1
Interrupt 4
Address 3FB
UART: NS 16550AN
Highest speed 115k baud
Command Response
ATI1 DE85
ATI2 OK
ATI3 AEIGEX56LKTF1
ATI4 17
ATI5 sQ0907A199V,0,19
ATI6 OK
ATI7 OK
AT+FCLA... 0,1,2
This is the message I get on my machines. If you are getting this far but no dial tone, there may be a conflict somewhere. Go to Device Manager, delete modems, com1, com2, lp1, and the usb info. Shut down and reboot. Usually window will sort things out and reassign everything so that there is no conflict. You may need you cab files when windows reloads.